1
MOLMOL--Slovnaft partnershipSlovnaft partnership““First step on the road to becoming a regional championFirst step on the road to becoming a regional champion””
Analysts’ Open Day28 February, 2001 - Bratislava
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AgendaSlovnaft introduction
General Market Information and Production Overview
Business Overview
Financial Information
Joint Strategy, Synergies and Improvement Targets
Q&A session
Slavomir HatinaSlovnaft CEO and Chairman
Vratko KassovicSlovnaft VP Strategy
Béla CsehSlovnaft VP Sales and Marketing
Heimo TomannSlovnaft CFO
Zoltán ÁldottMOL CSO
3
Slovnaft IntroductionSlovnaft Introduction
Slavomir HatinaSlovnaft
CEO and Chairman of the Board
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Slovnaft Group’s position� High quality refining configuration
� Unrivalled domestic market share
� Strategically positioned to capture growing Polish, Czech and
Austrian oil product markets
� Listed on the Bratislava Stock Exchange (Reuters: SNFT.BV)
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36
142
29
8
3
Slovakian State MOLInstitutional investorsPrivate investorsSlovbenaSlovintegraBONY
Shareholding structure (approximate %)
5
Partnership rationale
� Leading position, dynamic role in Europe’s fastest growing downstream markets
� Creating a superior regional refining and marketing group through financial and operational excellence
� Focus on value creation and realisation of synergies� Transfer MOL’s financial and restructuring
experience� Combined industry knowledge and financial
strength
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HumanHumanResourcesResources
JolanaJolanaPetrasovaPetrasovaSlovnaftSlovnaft
StrategyStrategy
VratkoVratkoKassovicKassovicSlovnaftSlovnaft
C E OC E OSlavomir HatinaSlavomir Hatina
SlovnaftSlovnaft
ProductionProduction
Jan Jan KavecKavecSlovnaftSlovnaft
FinanceFinance
HeimoHeimoTomannTomann
MOLMOL
CorporateCorporateServicesServicesLászlóLászlóFeketeFeketeMOLMOL
RetailRetailNetworkNetworkKárolyKárolyRobákRobákMOLMOL
MarketingMarketing
Béla CsehBéla CsehMOLMOL
Management Team
• Four Vice-Presidents nominated by MOL
• 14 key management positions filled with MOL delegates
• New management structure operational from January, 2001
Board of directors4 Slovnaft, 4 MOL
Supervisory board
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Employees of Slovnaft Group
� Rationalisation of parent company and subsidiaries will
be reviewed by end-2001
� High level of education
01 0002 0003 0004 0005 0006 0007 0008 0009 000
1998 1999 2000
Slovnaft Subsidiaries
8 0827 540
7 106
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General Market Information and General Market Information and Production OverviewProduction Overview
Vratko KassovicSlovnaft
VP Strategy
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Demand upside potential
Source: Petrofinance Country Profiles 2000
0
100
200
300
400
500
600
SK H PL CZ SLO B F A D I
cars
/100
0 pe
ople
0
0,5
1
1,5
t/ pe
ople
Cars/1000 people, (l.h. scale) Motor fuel consumption per capita (r.h. scale)
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Growing gasoline market
Market 2000: 13.9 Mt2003: 15.2 Mt
Annual growth: 3%
demand: 5500 ktCAGR: 5.5%/year
demand: 800 ktCAGR: 3%/year
demand: 840 ktCAGR: 2.5%/year
demand: 1720 ktCAGR: 4%/year
demand: 2020 ktCAGR: -4%/year
demand: 1320 ktCAGR: 2%/year
demand: 1030 ktCAGR: 3%/year
demand: 650 ktCAGR: 3%/year
PL
CZ
SK H
ROA
HR
SLO
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Strong demand for diesel
Market 2000: 24.0 Mt2003: 26.2 Mt
Annual growth: 3.5%
demand: 7750 ktCAGR: 3.2%/year
demand: 1340 ktCAGR: 2%/year
demand: 1250 ktCAGR: 3.5%/year
demand: 2500 ktCAGR: 3.5%/year
demand: 5990 ktCAGR: 2.5%/year
demand: 1800 ktCAGR: 5%/year demand: 2640 kt
CAGR: 2%/year
demand: 730 ktCAGR: 4%/year
PL
CZ
SK H
ROA
HR
SLO
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� Austria– continues to be a net importer in diesel– OMV's supplies to Hungary and Slovakia will continue, mostly to its captive
market � limited threat
� Poland– Net importer of motor fuels– Heavy refining investments completed, improvement in product quality– Lack of strong logistic background for major refiners
� Czech Republic– Production of motor fuels increasing due to new FCC investments– Significant market share held by Slovnaft– Logistics: direct threat to Slovakia
� Croatia– INA, with limited financial resources and it’s "step by step" approach in
quality-issues � limited threat to MOL
Competitive situation
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� Austria– Schwechat refinery - capacity of 210,000 bpd– FCC & Visbreaking refinery, including Steam cracker
� Poland– Plock refinery – capacity of 260,000 bpd, complex refinery with FCC,
HCK, RHC, including Steam cracker– Gdansk refinery – capacity of 72,000 bpd, HC
� Czech Republic– Litvínov – capacity of 96,000 bpd, HC, TC, including steam cracker– Kralupy – capacity of 66,000 bpd, FCC, MTBE
� Croatia– Rijeka refinery – capacity of 150,000 bpd, FCC, production of fuels,
lubricants, bitumens and chemicals
� Slovnaft : 110,000 bpd ; MOL Duna: 165,000 bpd
The Main Competing refineries
Abbreviations: FCC–fluid cat. cracking, HC–hydrocracking, MHC-mild hydrocracking, RHC-residue hydrocracking, TC-thermal cracking, MTBE-methyl,terc-butyl ether,
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��������������������� ���������������������� ���������������������������
����� ���
High complexity, high value products
%
Source: Petrofinance - Country Profiles 2000
* residue hydrocracking completed early 2000** delayed coker to be completed in 2001
** *Comparative conversion ratios
0
10
20
30
40
50
60
Austria INA Czech Rep. Poland Duna Slovnaft
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Gasoil desulphurisation in b/dCrude capacity b/d * 100Calculation:
Good position to meet EU standards
Comparative desulphurisation index
0
10
20
30
40
50
Austria INA Czech Rep. Poland Duna Slovnaft
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Parameters Unit EU 2000 HEU AEU SKEU Slovnaft CZ PL
Gasoline
Vapour pressure(in summer) kPa max. 60 60 60 60 60 70 70
Sulphur content ppm max. 150 150 150 150 20-40 500 500
Benzene content % V/V max. 1 1 1 1 0.4-0.8 5 5
Aromatic content %V/V max. 42 42 42 42 30-40 - -
Diesel
Density kg/m3 max. 845 845 845 845 835-840 860 860
Sulphur content ppm max. 350 350 350 350 280-300 500 500
Cetane number min. 51 51 51 51 51-52 49 49
%V/V
*EU in index means the given country undertakes to introduce EU specifications;Slovnaft in preparation for year 2005 specifications
Exceeding EU product specifications
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Highly profitable refineries
Source: Wood Mackenzie’s 1999 multi-client study ‘The Future of European Refining’
Impr
ovin
g A
uto-
Oil
Pos
ition
IncreasingNet Cash Margin
Median RefinerNet Cash Margin
Median RefinerAuto-Oil Position
Duna
Bratislava
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Slovnaft – key strengths
� Market leadership in Slovakia� Significant market share in Czech republic� Well positioned for growing Polish market � High level of complexity and EU quality products� Integrated, balanced refining and petrochemical
assets� Reliable and economical utilities production –
power, heat, water� Production integrated with distribution network
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Production OverviewProduction Overview
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AtmosphericDistillation(2 units)
VacuumDistillation(2 units)
Hydrocracker
FCC
LC Finer
Hydrotreaters(3 units)
Gas Plant(2 units)
C 5 /C 6 Isomerisation
CatalyticReformer
VGOHydrotreater
MTBE Alkylation
Light naphtha
Propylene
Vacuumresidue
Atmosphericresidue
Heavynaphtha
Light naphtha
Heavynaphtha
LPG
EthaneFeedstock toEthylene Plant
Feedstock toAromatics Plant
Polypropyleneand Cumene
feedstock
Aromatics discards
C 4 s fromEthylene Plant
Fuel oil
Diesel
Kerosene
Gasoline
LPG
Crudeoil
SelectiveHydrogenation
Existing process units
New process unitsadded by HPRU Project
LubricantsPlant feedstock
Vacuum gas oil
LCO
Slurryoil
Bitumen
Asphalt Plant
Note: Hydrogen production units and flows of hydrogen-rich gas not shown
Feedstock ton-Alkanes Plant
n-Alkanes raffinate
Lube extracts
Reformate
Refinery configuration
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Key refinery parameters(Plant as of 2000) Annual Capacity Utilisation Start-up Technology
Kt %Atm. distillation No 5 2700 97 1967 DomesticAtm.-vac. distillation No 6 2700 102 1971 DomesticVGO Hydrocracker 800 102 1990 UNOCALCCR Reformer 800 83 1998 UOPC5/C6 Isomerisation 250 64 1992 UOPGO Hydrotreaters 1800 94 1962-1973 DomesticGas plant 400 48 1962-1982 DomesticAsphalt Oxidation 270 16 1987 DomesticLube Oils 100 39 1962 DomesticHPRU: Residue Hydrocracker 1200 81 2000 ABB FCC 850 81 1999 UOP VGO Hydrotreater 1000 93 1999 UOP Alkylation 165 81 1999 Stratco MTBE 55 61 1999 IFP S recovery 90 57 1998 Stork
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Yield after (2001)Yield before (1999)
� Investment of USD 526 mn to convert heavy fuel oil into higher value products by heavy petroleum residue upgrading
� LC-Fining technology supplied by ABB Lummus. Chiyoda, Mitsubishi, Stork, Raytheon were selected contractors
� Gross margin impact of HPRU is around 1.8 USD/bbl
Major upgrade completed
18 %
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,0005,500
kt
20 %
37 %
23 %OthersFuel oilJetGasoilGasoline
33 %
48 %
3 %16 % %%
18%
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Petrochemical PlantsE th y le n e
P la n tE th a n e
L P G
L ig h tn a p h th a
H e a v yn a p h th a
P h e n o l
L D P E
P ro p y le n e
C 4 s to S e le c tiv eH y d ro g e n a tio n
L D P E P la n ts(3 u n its )
P o ly p ro p y le n e
P o ly p ro p y le n eP la n ts (2 u n its )
E th y le n e
B u te n e s
R e fo rm a te
A ro m a tic sP la n t
E th y le n eO x id e
E th y le n eG ly c o ls
E th y le n e o x id e
E th y le n e g ly c o ls
E th y lB e n ze n e
E th y lb e n ze n eB e n ze n e
T o lu e n e , x y le n e s
A c e to n eC u m e n e
H y d ro tre a te r
K e ro s e n e
n -A lk a n e sP la n t
n -A lk a n e s
R a ffin a te tod ie s e l b le n d in g
A ro m a tic s d is c a rd s tog a s o lin e b le n d in g
C u m e n e P h e n o l / A c e to n e
S o lv e n ts
P yro lys isG a so lin e
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Key Petrochemical plant parameters
Plant (as of 2000) Annual Capacity Utilisation Start-up Technologykt %
Ethylene Plant 200 103 1975 LummusLDPE 168 111 1964-1977 ICI, Eth. PlastiquePP 70 114 1972-1981 ChissoAromatics Plant 400 68 1973 LurgiEthylene Oxide 40 114 1976 ShellPhenol/Acetone 35 97 1966 Domesticn-Alkanes 55 86 1989 UOP
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Production targets
� Aiming to run Bratislava Refinery above 90% utilisation� Maintain high quality level of products� Further reduction in processing costs� Improve Health, Safety and Environment performance
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Business OverviewBusiness Overview
Béla CsehSlovnaft
VP Sales and Marketing
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Crude oil supply structure� Russian Export Blend Crude Oil via
Friendship pipeline� Adria pipeline connection (4 mn tpa) via MOL� Crude oil storage – Slovnaft 190 000 m3,
Transpetrol 100 000 m3 (store Slovnaft�s crude in its facilities)
� Transpetrol (capacity 21 mn tpa)� Average transport and storage fee is around
0.4 USD/bbl within Slovakia
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Transportation and storage
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Capacities of transportation(m3/h) and storage (m3)
7 1004800 (2 700)9 20033 000Diesel
190 000Crude oil
7 560 (4 860)3 450 (2 780)14 500 (10 200)30 000Storage :
Gasoline
---150barges
--180180pipeline
190150400195road
250-180280Output : rail
150-3601 200pipeline
15095400Input : rail
StožokKapušanyKla�anyBratislava
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Competitive products logisticsExcellent geographical location
� 3 dynamically growing markets well within reach� direct pipeline contact to Czech Republic� Danube river transport possibility to Austria and between the
two refineries
Efficiency improvement opportunities identified� Slovnaft-Benzinol integration� outsourcing of non-core activities
02468
101214
pipeline rail barge truck
USD
/t/1
00 k
m
2000 2003
31
Gasoline supply-demand balance 1999-2003F
1 000 kt g as o line in
20001999 2001 2002 2003
Reg ion total
408-647
6511,465 1,575
32
Gasoil supply-demand balance 1999-2003F
1 000 kt gas oil in
20001999 2001 2002 2003
Reg ion to tal
-2 170-2 705 -2 220 -2 680 -3 188
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� Market leadership and price setting role in Slovakia
� Significant exporter to surrounding countries
� Outstanding, reliable product quality
� Knowledge and experience of the market and customers
� Integrated company with a strong asset/capital base
� Comprehensive/integrated services
Strong position in wholesale
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Group sales by market - (2000)
By volume 4 686 kt
32%
68%
By revenues USD 1 453 mn
34%
66%
Domestic Export
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Group sales by product - (2000)
By volume
21%
3%1%1%
29%
43%2%
By revenue
1%2%
8%
3%
17%
30%
39%
Gasoil GasolineJET LubricantsLDPE PPother
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Domestic sales by product and channel
0
500
1,000
1,500
2,000
2,500
1997 1998 1999 2000 2001F
kt
other
Aviation fuel
Fuel oil
Gasoline
Diesel
0500
1000150020002500
1997 1998 1999 2000 2001F
kt Other
multinational
transport
industry
agriculture
37
Export sales by product and market
0500
1,0001,5002,0002,5003,0003,5004,000
1997 1998 1999 2000 2001F
ktother
Aviation fuel
Fuel oil
Gasoline
Diesel
0
1000
2000
3000
4000
1997 1998 1999 2000 2001F
ktOther
Austria
Hungary
Poland
Czech R.
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Slovnaft´s wholesale market share
50
60
70
80
90
1997 1998 1999 2000
SK %
0
10
20
30
40CZ, PL %
SK gasolines SK diesel CZ gasolinesPL gasolines CZ diesel PL diesel
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Business OverviewBusiness Overview
Retail OverviewRetail Overview
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Historical background
� Before 1949 the service station network operator wasSlovnaft‘s predecessor Apollo
� 1949 - Separation of businesses :Slovnaft - refiningBenzinol – retail activities
� 1992 - 87 service stations and 3 distribution terminalstransferred from Benzinol to Slovnaft
� 1995 Benzinol acquisition by Slovnaft� From 1998 Slovnaft Benzinol became Slovnaft‘s retail operator� From 2000 onwards MOL - Slovnaft partnership
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Current status
Sales in 2000:• Motor fuels 445 mn litres
Network in Slovakia :• 316 Service stations
(105 under Slovnaft 211 under Benzinol logo)
• 314 CoDo, 1 DoDo, 1 CoCo• 72% cash transaction, 25%
Slovnaft-Benzinol cards, 3% other
05
101520
Shop Lubes Services
USD mn
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Market share in Slovakia (2000)
5%
2%
1%
2%
1%
25%47%
4%
10%
3%
Slovnaft Benzinol
ACORD
SHELL
Transpetrol
OMV
TAMOIL
CONOCO
ESSO
MOL
Other
By number of sites
28%
4%
10%2%18%
1%
1%
2%
2%
32%
By volume sold
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Potential to grow throughput
Average sales1.6 mil. litres/year
0 50 100 150 200
0 - 1.5
1.5 - 3.0
3.0+
mil.
lite
rs /
year
/ st
atio
n
No. of stations
44
Non-fuel sales revenues potential
0
2
4
6
8
1999 2000
US
cent
/per
lite
r fu
el so
ld
Shop Services
45
Growth from services offered
Nonstop
WC
CREDITCARD
CHANGE
46
Growth potential in the region
316 sites
3 sites
2 sites
40 sites
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Growth from Fuel Cards� Fuel card program for fleets:
– 5000 customers, 50 000 cards, 110 mn litres fuel sales� Card Categories
– Gold card - both fuels and services– Silver card - only fuels– „Prezent” card – prepaid chipcard
� Card acceptance:– 316 Slovnaft Benzinol stations– 250 competitor stations
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„BONUS“ loyalty vs. other transactions
• 100 000 loyalty cards (Bonus) issued• 40% of transactions involved the loyalty system
40%
60%
BONUSOther transactions
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Improvement of the existing network
� Customer satisfaction
- customer focus
- improve quality of service and operational standards
- redesign the station’s interior to create customer
friendly atmosphere
� Network rationalisation
- focus on improving throughput and adding sites with
high throughput potential
- rationalisation of low performing sites
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Objectives of network development
� Increase of the average throughput from 1.6 mn litres/year to 2.5 mn litres/year within 3 years
� Build new high throughput sites and reconstruct minimum 13 sites/year in Slovakia
� Extend the network with greenfield investment and acquisitions in South-Poland and the Czech Republic
� Review Ukrainian position
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� Increase throughput and profitability of stations with marketing
tools and improved product mix
� Develop conditions of operational form (CoDo), establish more
effective co-operation with dealers/operators
� Increase non-fuel sales through convenience store and fast food
� Flexible, selective pricing for fuels and shop products
� Develop and extend customer loyalty
� Joint MOL/Slovnaft development of the fuel card system, mutual
acceptance, further increase of the customer base
Future steps
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Financial InformationFinancial Information
Heimo TomannSlovnaft
Chief Financial Officer and VP Finance
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Financial highlights of Slovnaft
* Preliminary, unaudited figures for year 2000** Capital Employed = Total assets - (L-t financial investments +
investment in process + S-t investments and cash + total current liabilities) + S-t debt
*** EBITDA Margin = EBITDA / Net Sales Revenues**** ROACE = Operating Profit / Av. Capital Employed
IAS group figures (mn USD) 1998 1999 * 2000 % 99/00Net Sales Revenues 985 1 036 1 552 50Operating Profit 109 73 175 140EBITDA 156 136 249 83Profit after Taxation 7 (58) 54 n.a.CAPEX 278 61 21 (66)** Capital Employed (year end) 1 076 880 940 7
*** EBITDA margin (%) 15.8 13.1 16.0 22**** ROACE (%) 10.8 8.1 20.2 149
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Gearing and Debt StructureDebt stucture (end-2000)Total debt: USD 422 mnNet debt /(net debt+ equity)
0%
10%
20%
30%
40%
50%
60%19
98
1999
2000
2001
E
2002
E
2003
E
Slovnaft
Long term gearing target 30 - 40 %
Long Term56%
Short Term44%
Others17%
USD74%
EUR9%
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CAPEX development
• Refinery modernisation completed in 2000• Focus on retail network upgrade and expansion• 2002 and 2003 indicative numbers only, under review
0
50
100
150
200
250
300
1998A 1999A 2000A 2001P 2002E 2003E
USD
mn
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Key financial targets for 2002
(*) ROACE= Operating profit/average capital employed
(**) Gearing= net debt/(net debt+equity)
� EBITDA margin: 15%
� ROACE (*): 20%
� Gearing (**) keep within target range including any potential acquisitions
57
New Finance organisation� New organisation: Treasury, Controlling, Accounting&Tax,
Resource Allocation
� CFO with international industry experience + 5 Finance Professionals from MOL in key finance positions from 2001
� Focus on increasing shareholder value and realisation of synergies and improvements
� Focus on controlling and treasury:� Debt restructuring using MOL’s capital injection� Risk management policy and cash pooling in preparation � Revised Controlling structure based on segmented MIS� Strict Capital budgeting
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Joint Strategy, Joint Strategy, Synergies and Improvement TargetsSynergies and Improvement Targets
Zoltán Áldott MOL
Chief Strategy Officer,Slovnaft
Vice-Chairman of the Board
59
MOL and Slovnaft together will have a leading position in Europe’s fastest growing markets
� Larger size, higher stability, better market reach
� Better geographical coverage of Southern Poland and Czech Republic
� Fast modernisation and efficiency improvements
� Utilisation of synergies
� Petrochemical integration and consolidation
� Cost-effective joint technological developments (economies of scale)
The winning combination
MOL/Slovnaftpartnership
State-of-the-arttechnology
Restructuringexperience of MOLapplied to Slovnaft
Strongest Europeandownstream growth
Financialstrength
Unrivalled marketshares in the region
Platform for furtherregional expansion
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Synergies and efficiency improvements
� MOL - Slovnaft partnership : substantial synergy effects to be realised
� Identified Synergy and Improvement effects in Slovnaft add up toUSD 10 mn in 2001 and USD 28 mn p.a. from 2002 onwards
� Upside potential: Further areas of potential synergy and improvement identified at high level but not planned in detail (USD 11 – 25 mn p.a. from 2002 onwards)
� All effects are improvements against the initial pre-MOL business plan.
61
Areas of synergies & efficiency improvement
� Production
� Marketing
� Retail
� Logistics
� Finance
62
Identified effects in 2001 – by area
12.9
1.6
4.63.3
0
10
20
30
Production Marketing Retail Logistics Corp.Services
andFinance
US
D M
illio
ns
63
Identified effects from 2002 onwards
7.6
7.0
5.1
5.8
5.7
0
10
20
30
Production Marketing Retail Logistics Corp.Services and
Finance
US
D M
illio
ns
64
Details of identified areas - 1
Production � Production rationalisation
� Technological improvements in certain areas
� Stage 1 of joint production optimisation with MOL
Marketing and Commercial Sales, Logistics � Optimise and harmonise marketing approach in overlapping markets
� Improve sales planning and controlling process
� Integrate Benzinol and Slovnaft logistics
� Optimise rail and road transportation
65
Retail• Revise non-fuel business strategy
• Joint operation of MOL’s Slovakian network
• Revise fuel card acceptance policy
• Standardise network construction and maintenance
Corporate Services and Procurement • Standardise procurement processes
• Common purchase of chemicals, additives, other materials and services including IT
• Common investment implementation procedures
• Joint Auto-Oil II project planning and implementation
Details of identified areas - 2
66
Finance • Reduce interest cost due to reduced debt level (capital injection)
• Better conditions for remaining debt
• Cash Pool-implementation (Slovnaft Group and later with MOL)
• Integrate risk-policy and operations
• Common insurance negotiations, captive insurance with MOL
Details of identified areas - 3
67
� Joint crude purchases
� Production (joint optimisation of refinery and lubricants production stage 2, common R&D and maintenance)
� Integration of subsidiaries, increased efficiency
� Increased efficiency in all Slovnaft operations, improved systems and processes, reduced headcount, outsourcing of non-core activities
Further upside to be substantiated:
asas 68
Summary of identified and potential benefits
10
28
Min. + 11
Max. + 25
USDmn
0
10
20
30
40
50
60
70
2001 from 2002 onwards
Identified Potential min Potential max
69
Jointly agreed strategic priorities
� Crude supply strategy
� Joint logistics
� Co-ordinated marketing strategies
� Regional sales build-up
� Retail modernisation, expansion into Poland
� Refining capex (Auto Oil II)
� Lubricants strategy (combined with MOL’s)
� Petrochemical developments
� Rationalisation of non-core investment portfolio
70
Petrochemical OverviewPetrochemical Overview
71
Significant Synergies in ChemicalsRefining/Petrochemical interfaceCompensation of CF cyclesFeedstock supply flexibility (optimisation, seasonality)
Site integrationFocus on products per siteSales and marketing performance leverageEfficiency improvement at unit levelCo-ordinated expansion and development
PartnershipsFeedstock co-ordination
Market stabilisation (supply-demand balance, market positioning )
Quantification of benefits started on MOL/TVK/Slovnaft level
72
MOL - Slovnaft petrochemical portfolio
� Focused on the olefin-polyolefin value chain
� TVK and Slovnaft represent strong regional market shares
Product Producer Capacity (kt) Benchmarking of assets in 2000Ethylene TVK 360 Leader
Slovnaft 200 AveragePropylene TVK 185 Leader
Slovnaft 90 AverageSlovnaft (FCC) 50 Leader refining technology
MOL (FCC) 70HDPE TVK 190 LeaderLDPE TVK 115 Average
Slovnaft 168 Below averagePP TVK 280 Above average
Slovnaft 70 Smaller units
MOL is already an integrated regional oil company with chemical activities
Leader refining technology
73
Polimers - regional supply/demand structure
Polymers balance in 2000
100 kt Polyethylenes
100 kt Polypropylene
100 kt PVC
MOL’s target market will be increasingly net importer
74
LEGEND
SLOVNAFT
MOL
TVK
SALES
NON EXISTING / TO BE DIVESTED
Status and opportunities
� Until recently limited, except as feedstock supplier• Now important stakes/control in Slovnaft and TVK� Refining/petrochemical optimisation and integration
will benefit corporate performance
PLASTICSPOLY-OLEFINSOLEFINSFEEDSTOCKS
(from refining)
INTER-MEDIATES
AROMA-TICS
75
SummarySummary
76
Progress and next steps
� Detailed targets have been set
� Detailed action plan for synergy realisation will be completed by mid 2001
� Develop detailed elements of new strategy:� co-ordinated development activities� rationalisation� efficiency improvementwith expected completion date of end 2001
77
Implications for MOL
� Transaction confirmed as earnings accretive� Stabilised market position� Possibility for further consolidation� Production and marketing cost-cutting by jointly
optimised operation� Co-operation is going smoothly, exceeding expectations� Strong leverage of different skills and knowledge base
78
Summary of Slovnaft’s strategy
Slovnaft’s main strategic goals
� Strengthen domestic & Czech market position� Develop market position in surrounding countries, special
emphasis on southern Poland� Apply European fuel quality specifications� Strengthen competitive position by applying modern
technology & processes in refining and petrochemical production
� Fully exploit synergies with MOL as a strategic partner� Be a reliable partner to all stakeholders